Tuesday, July 31, 2007

Indian economy’s reform path

If you were asked to tell something about the Indian economy’s reform path, you would I am sure, start with the 1990’s. But a noted economist like our present Deputy Chairman of the Planning Commission Mr. Montek Singh Ahluwalia would start elsewhere. Where precisely? See it in his own words, extracted from what appeared in today’s ET:

“Actually, during the early years of planning, we achieved a fairly decent rate of GDP growth, but as we entered the 1960s, performance slumped, food production fell, there were forex constraints and don’t forget, we had major wars with our neighbours. It was during this time that people started questioning the continuance of the socialist model of governance.”

“Come to think of it, the reform process actually started in the 1960s, when Mrs. Indira Gandhi supported the Green Revolution, which was carried out with the help of imported high quality seeds and fertilizers. But the winds of change became strong as the last decade started; professionals and business people were ready for a change and welcomed the reform process. In fact, the initial tempo was sustained quite well and the growth rate picked up in early 1990s. But the growth rate decelerated in the mid-90s owing thanks to the East Asian crisis and the economic slowdown. But we haven’t looked back since!”